Correlation Between Aegon NV and Joint Corp
Can any of the company-specific risk be diversified away by investing in both Aegon NV and Joint Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aegon NV and Joint Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegon NV ADR and The Joint Corp, you can compare the effects of market volatilities on Aegon NV and Joint Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aegon NV with a short position of Joint Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegon NV and Joint Corp.
Diversification Opportunities for Aegon NV and Joint Corp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aegon and Joint is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Aegon NV ADR and The Joint Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Corp and Aegon NV is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aegon NV ADR are associated (or correlated) with Joint Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Corp has no effect on the direction of Aegon NV i.e., Aegon NV and Joint Corp go up and down completely randomly.
Pair Corralation between Aegon NV and Joint Corp
Considering the 90-day investment horizon Aegon NV is expected to generate 44.46 times less return on investment than Joint Corp. But when comparing it to its historical volatility, Aegon NV ADR is 1.82 times less risky than Joint Corp. It trades about 0.0 of its potential returns per unit of risk. The Joint Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,110 in The Joint Corp on September 4, 2024 and sell it today you would earn a total of 62.00 from holding The Joint Corp or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegon NV ADR vs. The Joint Corp
Performance |
| Timeline |
| Aegon NV ADR |
| Joint Corp |
Aegon NV and Joint Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegon NV and Joint Corp
The main advantage of trading using opposite Aegon NV and Joint Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegon NV position performs unexpectedly, Joint Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Joint Corp will offset losses from the drop in Joint Corp's long position.| Aegon NV vs. Goosehead Insurance | Aegon NV vs. Enstar Group Limited | Aegon NV vs. American International Group | Aegon NV vs. Sun Life Financial |
| Joint Corp vs. Encompass Health Corp | Joint Corp vs. Pennant Group | Joint Corp vs. Enhabit | Joint Corp vs. ModivCare |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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